What is a VAT Loan?

VAT Loan

Business VAT Loans

Many Businesses are now choosing to use a VAT Loan to ease their cashflow when the VAT bill is needed to be paid.

When a business has turnover of over £85,000 it needs to be registered for VAT with HMRC. The business agrees to retain the VAT element on behalf of HMRC and is required to repay this back normally on a quarterly basis.

It is seen that some businesses use the VAT element as cashflow and sometimes struggle to repay the VAT element back to the HMRC.

It is in these instances when businesses can’t make the quarterly VAT repayment then an alternative solution is required. This can be in the form of a VAT LOAN.

VAT repayments are often difficult for many businesses and therefore having the option of a VAT loan can take the pressure off cashflow.

When does HMRC require the VAT to be paid?

The HMRC allows the VAT to be paid within five weeks of the date ii becomes due at the end of each quarter.

This can often present cashflow issues as potentially the VAT repayment could come at the same time as some other larger commitments such as wages, rent, supplier payments etc.

How is a VAT loan paid to HMRC?

This is dependent on the individual lender. It can either be paid direct to the Business who will then repay HMRC, or it can be paid directly to HMRC by the lender. In most cases it is the latter as the lender then knows that the payment has been made to HMRC.

How long can a VAT loan be taken over?

Most VAT loans are usually taken for a three month period as this is when the next VAT payment is due. A second VAT loan can then be taken out and the cycle repeated. We do have a number of lenders who will look to stretch to 12-24 months if a strong case can be presented for this.

Where can I get a VAT business loan?

Typically, you will only be able to obtain a VAT business loan from alternative finance providers rather than from High Street Banks.

All Star Funding Solutions can introduce your business to the right VAT loan specialist for your circumstances.

What are the benefits of a VAT Business loan?

  • Funds can be in your account in under 24 hours
  • Your business can pay the loan back after you reclaim the VAT
  • Helps to evenly spread the cost over a number of months.
  • Keep your cash flow consistent
  • Funds can be paid directly to HMRC
  • You can pay back with easy monthly repayments

VAT Business Loans can help your business bridge the gap and assist with better cashflow.

How to apply for a VAT Business Loan?

Applying for a VAT Business Loan is very simple. All you need to do is tell us how much you wish to borrow and provide the following items of information:

  • 3 Months Bank Statements
  • A copy of the Year End Accounts (if available)
  • A copy of the VAT return to be paid

A credit search will also be carried out on each partner or director. After this search has been completed and we have all the relevant information the loan will be made available.

Click below and complete a simple form to get Started.


Furthermore if you would like to talk directly to one of our experts please call 0161 8211478

Finally as members of the Financial Intermediary and Broker Association you can be assured of a great service. https://www.fiba.org.uk/

Finance approval is subject to status and terms and conditions apply.



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